Dan Ariely: Why CEO's should keep their employees happy

This article was taken from the April 2011 issue of Wired
magazine. Be the first to read Wired's articles in print before
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A few months ago an ex-student of mine, who was working for a
big software company, asked me to come and spend some time with her
and her team. My student, together with the large team, had worked
very hard for two years on an innovation that they believed was the
best new idea in the "computer world". They worked very hard and
were full of hope. But before I arrived at their offices, the CEO had looked at the project and cancelled it.

So, I was sitting with some highly creative people who were
completely deflated. I asked them, "How many of you show up to work
later than you did before the project was shut down?" Everybody
raised their hand. I next asked, "And how many of you go home
early?" All hands went up. Lastly, I asked them, "How many of you
feel that you are now more likely to fudge your expenses a bit?" In
this case, no one answered. Instead, they smiled a little.

Now, it's possible the project was really not that good, or that
it did not fit with the direction of the company, which would mean
that cancelling it was the correct decision. But, even if this were
the case, we can ask whether there are different ways to cancel
projects, and whether some of the approaches to cancelling projects
can sugar-coat the blow in a way that would keep team members
excited and interested in their work. So I posed this question to
the high-tech team and they came up with a few interesting
suggestions:

1. The CEO could have asked them to present the project to the
entire company. The presentation would have included the process
that the team followed and the final product specifications. This
would have allowed everyone at the company to understand and
(hopefully) appreciate the hard work that they had done, which
would have given the team some recognition and appreciation.

2. The steps that the team took in the process of development
could have been collated, and then used to develop a template that
could help other teams as they developed their new products. In
this way, they would not have felt that their work had been
wasted.

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